IRS to begin private collection of federal tax debts
Starting this spring, the IRS will initiate the collection of federal tax debts using one of four private collection agencies. These agencies have been designated to recover outstanding inactive tax receivables on behalf of the government. A sample taxpayer notice, CP40, can be accessed online at www.irs.gov/pub/notices/cp40.pdf.
At ShindelRock, we have extensive experience with collection agencies working for other governmental bodies, and it’s often a challenging process. Our interactions have shown that communication between these agencies and the government can be delayed and frequently contains inaccuracies or omissions. This complicates issue resolution because responsibilities are divided between two entities. We’ve encountered situations where we resolve an issue with one entity only to find the other continuing the collection process. This issue affects not only delinquent taxpayers but also anyone the IRS identifies as owing money.
Moreover, the lack of effective communication forces us to spend extra time coordinating between the government and collection agency, which translates into additional costs for our clients.
This makes it all the more important that our clients contact us as soon as they receive a notice. Please be prepared that if we do have to reach out on your behalf to the IRS or these collection agencies, we will always work as efficiently as possible on our side. If you have questions, please feel free to reach out to your ShindelRock tax professional at any time.